Inc Terra Lycos - Pursued Portal Strategy, 1998-2000

PURSUED PORTAL STRATEGY (1998-2000)

In 1998 Lycos introduced e-mail and chat capabilities. It added content to its portal-like site through partnerships and acquisitions. It acquired Tripod Inc. for $58 million as part of its strategy to increase traffic and build online communities around targeted content. Tripod provided free Web pages to about one million users, with news and commentary tailored to young adults. Both Lycos and Tripod were among the top 10 most-visited sites on the Web. Following the acquisition, Lycos and Tripod would continue to operate under their own names as part of Lycos's multi-branding strategy.

Other content partnerships were formed with Preview Travel, which became the exclusive multi-service provider of travel reservations on Lycos's Travel Web Guide and Travel Network, and CDNow, which became the exclusive retailer of music-related products on Lycos and Tripod sites. CDNow paid Lycos $18.5 million over three years to be featured on Lycos's Shopping Network and Entertainment Web Guides as well as on music-related search results pages, banner ads, and links. Other deals were struck with contact management site PlanetAll and career sites The Monster Board and Online Career Center. During 1998 Lycos introduced its free SafetyNet service, which filtered out objectionable content from Web site searches. Lycos also became the designated content provider for Juno Web, which had 5.5 million subscribers to its free e-mail service.

Lycos's $133 million stock purchase of WhoWhere Inc. was a major step in its portal strategy. The acquisition included the popular WhoWhere Internet white pages; MailCity, a free electronic mail system; and Angelfire, a free Web page hosting service. MailCity had 9.3 million registered users, and Angelfire had 1.3 million users.

Lycos made another major acquisition in October 1998 when it purchased Wired Digital Inc.'s online products, which included the popular HotBot search engine, Wired News and HotWired news sites, and other content sites offering shopping, e-mail, chat, and travel services. Wired Digital was the last remaining piece of Wired Ventures Inc., which launched Wired magazine in 1993 and subsequently sold it to Conde Nast Publications in 1998.

Lycos's acquisitions of different brands and products were designed to make it a "super site" that offered a portfolio of products for a variety of users. Lycos was also developing a community of users by offering features such as chat and gaming. For fiscal 1998 ending July 31 Lycos reported revenue of $56 million but still posted a loss.